Day Traders Diary

6/7/17

 Action has been pretty limited at the macro level so far today as investors hit pause ahead of tomorrow's much anticipated events, which include the UK election, the ECB policy decision, and the testimony of former FBI director James Comey. Recent selling pressure has pulled the major averages into negative territory, however, losses are minimal. The S&P 500 is lower by 0.1%.

The major averages opened Wednesday's session with modest gains, but they slipped a bit following a bearish inventory report from the Energy Information Administration (EIA); the report showed that both crude and gasoline inventories increased by 3.3 million barrels for the week ended June 2. Crude oil instantly quadrupled the 1.0% loss it took into the EIA reading and currently trades 4.7% lower at $45.90/bbl.

As one might expect, the energy sector (-2.1%) tumbled in tandem with the commodity. However, the heavily-weighted financial sector (+0.7%) has done its part in keeping the broader market afloat with nearly all financial components trading in positive territory. Banks like Citigroup (C 61.96, +0.95) and Bank of America (BAC 22.48, +0.25) show relative strength.

Similarly, the top-weighted technology sector (-0.1%) helped keep the bears at bay early, but the sector has since slipped into negative territory. Still, chipmakers continue to exhibit relative strength, evidenced by the 0.4% increase in the PHLX Semiconductor Index.

The health care (unch), consumer discretionary (unch), utilities (+0.4%), and real estate (+0.3%) sectors also outperform, but the remaining spaces show losses between 0.1% (materials) and 0.6% (industrials). The industrial group has struggled throughout today's session with Dow components General Electric (GE 27.56, -0.38) and Caterpillar (CAT 102.78, -1.77) showing notable weakness. The two names are down 1.4% and 1.7%, respectively.

However, despite the equity market's downtick, safe-haven assets like the Japanese yen (109.38, unch), gold ($1,293.13/ozt, -0.3%), and U.S. Treasuries still show modest losses. The benchmark 10-yr yield has climbed two basis points to 2.17%.

On the data front, the weekly MBA Mortgage Applications Index increased 7.1% to follow last week's 3.4% decrease. Investors will also receive April Consumer Credit (Briefing.com consensus $15.0 billion), which will be released at 15:00 ET.